Cost of insuring UK debt against defaults falls as Sunak becomes PM

LONDON, Oct 24 (Reuters) – The cost of insuring Britain’s debt against default fell to its lowest level since last month’s “mini budget”, S&P Global Market Intelligence data showed on Monday. , after Rishi Sunak won the race to become Britain’s next prime minister. minister.

Five-year sovereign credit default swaps (CDS) on UK government debt fell to 30 basis points from 35 basis points at Friday’s close. It was their lowest since September 23, when outgoing Prime Minister Liz Truss and her then finance minister Kwasi Kwarteng unveiled a budget plan that contained billions of pounds in unfunded tax cuts.

Sunak, who served as finance minister under Boris Johnson, said on Monday Britain faced serious economic challenges and needed stability and unity.

Debt insurance charges from some of the UK’s biggest lenders have also fallen.

5-year CDS for HSBC (HSBA.L) fell to a one-week low of 130 basis points from 131 basis points on Friday, while those of Barclays (BARC.L) fell to 140 bps against 147 bps and those of the Natwest group (NWG.L) narrowed to 127 basis points from 134 on Friday.

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Reporting by Amanda Cooper; Editing by Karin Strohecker

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John A. Bogar